Seattle-based Zillow, which apparently stands for "zillions of pillows" (or that’s the genesis of the name/URL), launched today.
The site is a very polished and sophisticated new entrant in the increasingly competitive online real estate market. Its primary — and somewhat amazing — attribute is that you can potentially look up the value of any residential property in most markets across the U.S. (The coverage is not total but impressively broad.)
It also uses a map as its principal interface (similar to HomePages.com before it).
For example, here’s a valuation on the two-unit apartment I used to live in in San Francisco. And here’s more detail on the property. (The owner recently sold it and I think the data reflected are generally accurate.)
I got a briefing on the site from CEO Rich Barton, founder of Expedia, a couple of weeks ago and was very impressed by the "heavy lifting" he and his team had done to collect, distill, scrub and present all this data. That effort seems to erect fairly significant barriers to duplicating what they’ve done.
The site is intended to provide, as Barton said to me, more "transparency" to both buyers and sellers about the value of homes as they’re contemplating either side of the transaction. The site intends to support itself with advertising from Realtors and others associated with real estate transactions (mortgage brokers, moving companies, etc.).
Impressive as Zillow is, the missing piece here is the for-sale listings themselves. In other words, Zillow currently doesn’t allow would-be home buyers to look for homes for sale on the site (they have to go to HomeGain, Realtor.com, HomePages.com, Trulia or any number of other sites). So right now it’s a tool that complements other sites that present MLS listings.
Yet to make the site more complete it will eventually need to present this for-sale information. (It might also be a great platform for "for sale by owner" listings.) Yet Barton and co. have many interesting ideas up their collective sleeves for "phase II" and "phase III" features.
Barton, who is also a partner at VC firm Benchmark Capital, and his team have grabbed a considerable $32 million in funding, which sets the expectations fairly high for them and Zillow.
I anticipate that as word of Zillow gets out people will show up to check the values of their houses and their neighbors’ houses out of curiosity. That will generate some good word of mouth for the site. Barton also indicated he’s going to try to syndicate some of the data across the Internet (and perhaps to traditional newspapers).
I got a question yesterday from a reporter about whether this would "disintermediate" the local Realtor. The short answer is "no." There’s still too much micro-local knowledge that can’t be embodied on the Internet (and the Internet can’t really negotiate for you). But it may over time — depending on its success — put pressure on real estate commissions or enable some incremental number of buyers and sellers, where it’s legally possible, to do the transactions themselves. We’ll have to see. (Maybe appraisers will have something to fear from Zillow.)
Real estate is a fascinating market and we believe something of a leading indicator of trends in local. There’s a great deal of money circulating in the "real estate ecosystem" — $12 billion annually is spent on advertising, according to the National Assn. of Realtors. And consumers are using the Internet now as an integral part of their home-buying process: 77 percent, according to the same trade association’s most recent data.
It will be interesting to see how the public responds to Zillow, how the site evolves and the response of competitors. And undoubtedly it will ultimately be acquired.
Another B2B map-based real estate site launched almost simultaneously: PropertyShark.com (which takes aim at Zillow in its press release). There’s a lot of coverage out there. Here’s more from the Seattle PI and SiliconBeat.